Which of the following statements is correct regarding job order and process costing systems?

Which of the following statements is correct regarding job order and process costing systems?

A : Cost of goods sold is not used in a job-order cost system.

B : A process cost accounting system is appropriate for unique products that are produced in batches or jobs.

C : A job-order cost system and a process cost system are two alternative methods for valuing inventories.

D : A job-order cost system is most appropriate when a large volume of uniform products are produced.

Expert Answer


Answer is Option A) Cost of goods sold is not used in a job order costing system.


Process cost is used for large volume of similar products.

Job costing is used for unique products.

Job-order cost system and process cost system are methods of costing to find the cost of each job or process.

Cost of materials issued for the job, employee costs incurred for the job and the overhead charges at the time of completion of job are used in asertainment of total job expenditure but not cost of goods sold. So the answer is option A.

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